ABB eases back on growth targets

Swiss-based power and automation group ABB said it expects growth to be slower than expected as it enters a “challenging” 2014.

ABB, which unveiled its full-year results today, had already flagged up a $260m hit in fourth-quarter earnings at its Power Systems unit as a result of operational issues at North Sea offshore wind grid-link projects – issues it says it is tackling under a new management team.

Today it said “greater order selectivity” in Power Systems, plus lower-than-expected GDP growth and customer capital expenditures in 2013, means compound annual growth rate (CAGR) excluding acquisitions in the 2011-2015 period is likely to be 4% to 5%.

The group had previously put out a CAGR target of 5.5% to 8.5%.

ABB said: “The company expects 2014 to be a challenging year for revenue growth but expects to return to its pre-2013 growth trajectory in 2015.”

However, the Zurich-based group said the long-term outlook for its business remains “clearly positive” thanks to factors such as action to tackle global warming and the need to upgrade power grids.

ABB made a net profit of $2.79bn in 2013, 3% up on the 2012 figure.